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April 2014: Government Affairs

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April 2014

Government Affairs

Opinion: Small Businesses Bear Brunt of Health Care Law

Another week, another failure of the President’s health care law comes to light.

New problems surface before the ink can dry on previous reports of problems. Last month, a report from the nonpartisan Office of the Chief Actuary at the Centers for Medicare and Medicaid Services showed two-thirds of small businesses will face premium increases, affecting 11 million people.

Also in February, California canceled the online options for small businesses, just four months after putting up a small business health plan website.

Before that, still in February, President Obama unilaterally decided to delay the health coverage mandate on companies with 50 to 99 employees until 2016. The President is using unprecedented executive action to choose who gets relief from this burdensome law (and notably, who doesn’t), though he and his Senate allies have ignored legislative efforts in the House to provide relief from the law to everyone.

The facts continue to shatter the President’s lofty promises. Pundits focus on this drumbeat of news as a political burden for the President, but the real concern is the economic burden the law places on small businesses. Small firms are particularly vulnerable to the uncertainty and higher costs from this disastrous law. This week, the Small Business Subcommittee on Contracting and the Workforce will examine how the health care law affects the self-employed.

The President’s unilateral use of his pen and his phone, as he memorably boasted of his circumvention of the Congress, to change the health care law deeply undermines its credibility – and his. For small businesses, the credibility of this law was already shaken by the President’s delays of the online applications for the Small Business Health Options Program (SHOP).

On top of the confusion around the constant state of change in the law, we still don’t know how many small businesses have been able to purchase health care for their employees. As of Jan. 1, 2014, Kentucky’s “model exchange” had signed up only 14 small businesses. On Jan. 30, I asked Health and Human Services (HHS) Secretary Kathleen Sebelius to update Congress about the federally run SHOP’s enrollment progress. While we know the state-run small business programs are off to a sluggish start, and California’s program was taken offline, HHS still has not released how many small businesses have purchased health care from the federally run exchange.

Each new delay is an acknowledgement that this bad policy isn’t working. The initial SHOP delay was an admission that the Obama administration was unprepared, but the latest delay of the mandate is an even bigger admission – that the law is having a heavy economic cost. Many of these businesses already have made the cuts and tough employment decisions to comply with this burdensome law. Most of those jobs aren’t likely to come back because of a temporary delay in this flawed policy.

Small businesses are off to a slow hiring start in 2014, according to Intuit’s tracking. That should be no surprise when small businesses are grappling with health care costs that have doubled since 2009, according to a survey released in February by the National Association of Small Businesses.

A study by the nonpartisan Congressional Budget Office comprehensively confirmed that the health care law is slowing the economy, adding to the national debt, costing jobs and even reducing wages and work hours. The total cost of the health care law to taxpayers is soaring, now at $2 trillion over 10 years. z

The debate is no longer merely about the unprepared bureaucracy, the botched rollout and the failure to construct a secure, reliable website. These are just the tip of the Obamacare iceberg. The widespread damage of this ill-conceived law is not even contained to the millions of Americans who received a cancelation notice in the mail. Every American has a stake in the economy and the nation’s fiscal health.

The U.S. economy is paying a high price for a broken law’s broken promises.


Rep. Sam Graves (R-MO) is chairman of the House Small Business Committee.

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